StoneX cuts Charter target to $200 amid third-quarter loss and customer pressure
Key Facts
StoneX cut its price target for Charter Communications to $200 from $380 on November 9, while maintaining a "Buy" rating, following third-quarter results in which the company posted a per-share loss and a decline in its internet customer base. On the same day, Wells Fargo raised its target to $103 from $101, while maintaining an "Underweight" rating, reflecting a split between the two firms on the stock’s valuation. The stock closed at $118.07 on November 6, the latest closing price included in the available data. Charter reported its results on November 6, after completing the Cox deal in August. The results combined deal-related growth in reported revenue with a decline in pro forma revenue, alongside operating and cash flow pressures.
Reported revenue was $14.9 billion in the third quarter, up 9.1% year over year, while pro forma revenue fell 1.5% to $16.5 billion. The divergence reflects the inclusion of Cox’s operations in reported figures, as the deal added more than 11 million serviceable locations and more than 5 million customer relationships. Charter completed the deal on August 19, 2026. The increase in reported revenue therefore does not indicate comparable growth on a pro forma basis. According to Reuters, revenue fell short of the average analyst estimate of $15.03 billion.
Core earnings per share turned into an actual loss of $20.50 in the third quarter, compared with income of $8.50 per share in the same period a year earlier. Charter said the actual net loss per basic share reflected the period’s results, while Reuters reported that analysts had expected a profit. The company also had total debt of $108.6 billion at the end of September, compared with $573 million in cash. These figures underscore the importance of monitoring the company’s cash flows as it implements its new operating model. Free cash flow was $674 million, down $947 million from the third quarter last year.
Internet subscriber losses remained a major operating pressure: the customer base fell by 233,000 on a pro forma basis during the quarter, compared with a loss of 171,000 a year earlier. The decline included 156,000 customers in legacy Charter operations and 77,000 in legacy Cox operations, while total internet customers stood at 34.3 million on September 30. By contrast, the video customer base fell by 77,000, at a slower pace than the loss of 121,000 in the corresponding period. Chief Executive Chris Winfrey said on the post-results call that the company "did not achieve the customer growth and performance we expect." Paolo Pescatore, founder of PP Foresight, described the growing broadband losses as "concerning and highlighting the scale of the challenge," adding that cost cuts alone "simply cannot put the company back on a growth path."
On the other hand, Spectrum Mobile added about 508,000 lines on a pro forma basis during the quarter, bringing the total to 13.5 million lines on September 30. Capital expenditure on the same basis was $3.2 billion, compared with $3.6 billion a year earlier. Charter expects capital expenditure of about $13.0 billion for 2026, excluding transition expenses. The company’s statement did not directly link this spending level to analysts’ price target revisions. The company also announced an operating model targeting annualized savings of $2 billion over 18 months, in addition to more than $1 billion in expected synergies from the Cox deal.
The stock’s moves around the results announcement varied: the Associated Press said it fell 6.2% on November 6 after the quarterly loss was reported, while Reuters reported a 2.7% decline in morning trading that session and said it was down 39.7% year to date through the November 5 close. On November 9, TD Cowen cut its target to $345 from $372 while maintaining a "Buy" recommendation. The report said revenue was in line with expectations and subscriber losses were better than expected, but the company missed estimates for earnings before interest, taxes, depreciation and amortization. These revisions, along with the moves by StoneX and Wells Fargo, show differing targets and assessments after the results. The company has placed cost savings and Cox integration among its next priorities, while Investing.com reported consensus estimates for the fourth quarter of earnings per share of $11.06 and revenue of $13.58 billion.